Rising cost of college has students, parents struggling to find their way

Wednesday

May 28, 2008 at 12:01 AMMay 28, 2008 at 7:06 AM

As the cost of college rises and financial aid options change, students and their parents struggle to navigate through the system without being swamped with debt.

Don Conkey

A college education is part of the American Dream. Now its cost has become a national nightmare. “Something needs to be done. The prices for college are so far out of sight,” said Peggy Marshall of Kingston.

And Marshall has the tuition bills to prove it: She has twin daughters in college – one at Bridgewater State College and the other at Cape Cod Community College. Her other daughter, a senior at Silver Lake Regional High School in Kingston, is headed to Quinnipiac University in Connecticut this fall, and her 16-year-old son will be college-bound not long after that.

“I’m overwhelmed, and definitely worried. It really concerns me and my husband as far as retirement goes, and how much our kids are going to be required to pay,” Marshall said.

Countless people these days share her angst, including high school seniors who have settled on colleges and now wonder just how they are going to pay for it all.

“It seems to be the trend that costs are going up, and financial aid is not increasing at the same pace as costs,” said Janet Gumbris, director of financial aid at Bridgewater State College.

“So, more and more students have to rely on alternative loans. A big change has been students needing more loans to cover their costs, so private loans have been increasing,” Gumbris said.

$300,000 in debt

The Marshalls hardly are kicking back while their kids go to school: Peggy owns two businesses, a day care and a nanny/sitter referral service, and her husband is a manager at a department store.

Still, she estimates that after all four kids have gone through college, her family will owe about $300,000 in college-related debt. That’s after all financial aid, scholarships and the like.

The plan is for Peggy and husband Jeff to pay back about half of each of their children’s college debt, with the kids assuming the rest. The kids will be responsible for paying all of their graduate school expenses, she said.

Peggy and Jeff have already taken out an equity loan to handle college costs, and figure they will have to increase it at some point. They are also set to co-sign on federal student loans as they come along.

Peggy Marshall said that while she is confident that the family will find a way to pay back all of the debt, she doesn’t expect it to be easy.

“I hoped that by the time I had children in college, I could drop down to owning one business, and that Jeff and I could both start thinking about retiring. That’s not happening anytime soon,” she said.

“The system,’’ she added, “is out of whack.”

People ‘should not panic’

The concerns of parents and students were only heightened recently when the Massachusetts Educational Financing Authority announced that it was suspending all federally guaranteed student loans as of July 1.

MEFA said the mortgage crisis and a series of federal changes had made it difficult for the nonprofit state organization to secure funds for its federal education loan programs, and urged parents and students to make alternative plans for the fall 2008 semester.

College financial aid professionals say that while students and their parents are understandably concerned over loan issues, the situation is far from hopeless.

“It is fair to say people are nervous, but they should not panic,” said Stephanny Elias, director of student financial services at Curry College.

While the financial aid landscape might be changing, federal loans will still be available to students, Elias said.

“Many lenders are still in the game all over the country,” she said, with colleges able to work with the lenders to find ways to keep government-backed loans a viable option for students.

‘Apply, apply, apply’

Navigating through the college loan and financial aid system can be more complicated now than ever, with parents and students having to consider just how much debt they can afford, and the best ways to finance it.

Many parents and students are taking out private loans, surfing through private lenders’ interest rates in the same way they’d look for a car loan.

Students should be aware that there is a lot of money available to them through grants and scholarships, Gumbris said.

“Apply, apply, apply,” she said. “It is not hopeless. Once they apply, they might be surprised to see what’s there. Every little bit helps,” she said.

John Garofalo, director of guidance at Silver Lake Regional High School, said students and parents should be realistic about what they can reasonably afford.

“Parents come in and will say ‘we need to come up with $15,000 a year, what do we do?’ Garofalo said.

Sometimes, the best answer is to explore options along with that college’s financial aid package, and if the finances do not add up, perhaps choose a less expensive college.

“I tell parents, ‘Let’s take it one step at a time.’ You should always reach for the stars, but people should be realistic along with that optimism,” he said.

Taking it in stride

Meanwhile, college students go to class, try to get good grades, and hope that the finances will eventually work out.

“It is concerning to a certain point, but I’m not really worried about it now,” said Jenn Forrester, a Brockton resident who is a freshman at Bridgewater State College.

Forrester, a psychology major, estimates that she will owe about $50,000 when she graduates.

“It’s going to take a while to pay it off, but it’s a lot better than having to pay, say, $50,000 a year,” she said.

“I don’t understand why some people end up doing that, financing so much money.

“Go to a school, get a great job – and then, all of the money goes back to school. The money that I make, I want to keep.”